What is the legality/tax implications from making money from Ebay?

Yes it does. In general. That's not to say there aren't exceptions.

I think you are both saying the same thing from slightly different perspectives.

Mens Rea means that you knew what you were doing and deliberately carried out the deed. It does not mean that you necessarily knew that the deed in question was against the law.

e.g. if a shop assistant gives you too much change and you keep it, you are not guilty of theft if you keep the money because you had not noticed that you had been given too much change. If however you noticed the over-payment but thought that it was perfectly legal to keep the "windfall" and so deliberately said nothing, intending to keep the money that you knew you were not entitled to, you would be guilty of theft *even though* you did not know that you were doing anything illegal and did not feel guilty about it.

The actions in both cases are exactly the same, but the knowlege (or lack thereof) makes all the difference as to whether you are guilty or innocent.

I think it does. Literally, the phrase means "guilty mind". I was once under the mistaken impression that here "rea" was a form of the noun "res", meaning "matter", which would have supported a loose translation along the line of "mindful of the act", i.e. your interpretation that it (only) means you have to be aware of doing it, not necessarily that it is wrong, but in fact it's a form of the adjective "reus", meaning "guilty", so the implication has to be that you knew you were doing something wrong, i.e. something to feel guilty about.

Agreed.

No. If you honestly believed that behaviour to be OK, then you were not technically guilty of theft. But: (1) That's a very big if. I mean, come on. Who in their right mind would honestly believe that if a shopkeeper accidentally gave you too much change, it would count as a gift? (2) Even so, if you were caught and the error explained to you, then (a) you'd still have to give it back (just because it wasn't theft doesn't mean it was a gift), and (b) you could now be presumed to know, so that next time (if there is one) it *would* be theft.

Yes, that's one of two aspects. I believe in order to be guilty of a criminal offence you *both* have to know you are committing the act in question, as you say, but also that the act is naughty.

First and foremost because they probably aren't making any money (given that most people buy items at new retail price and sell them at a lower price). If you were making money then the issue is whether it is capital gain (for most people) or income (for people making a living out of trading). Last, you wouldn't need to declare if you were below your tax threshold for the appropriate tax in a given year.

Thom.

One of the questions that pops up here (uk.legal) pretty frequently is along the lines of "I ordered something from a supplier, and they delivered two of them, (or they delivered something more valuable), can I keep it?" Often they get the answer that they can, because its an unsolicted gift (Its not, and they can't). So, yes, there seem to be plenty of people who might think exactly as you suggest above.

(2) Even so, if you were caught and the error explained

Not quite. As just one example, you can be guilty of possessing an illegal drug without knowing you possess it - all the law requires is that you are aware of possessing the item in question (so you have a defence if someone plants the drugs on you without your knowledge - you can't be guilty of possessing something of which you are unaware) but the law doesn't require that you intentionally, or knowingly possessed the illegal substance. Its no defence that you didn't know what it was, or believed it to be something entirely innocent. Which goes against the statement that

"the implication has to be that you knew you were doing something wrong, i.e. something to feel guilty about" .

Brian

It is not possible to interpret the law based upon normal dictionary definitions of words (even Latin words). Certain phrases have specific meanings in law that is different to their literal meanings.

Plenty of people. A common question on uk.legal is "I have been overpaid by £X, am I allowed to keep it?"

There are *many* laws that are poorly understood, and even some laws where the legality of the act can only be determined by a court - it is impossible for *anyone* to know whether the act is against the law or not unless and until a court decides on the specific issue (I disagree completely with such laws, but the fact is that they exist).

If what you say is correct, the prosecution would have to prove in every case that the defendant knew that the act was in fact against the law. Very few people could be convicted of a first offence - they would simply claim not to have known that what they did was against the law. Try proving that I know that it is illegal to punch someone in the face for insulting my wife. Try proving that I know that it is illegal to rewire my house so that the mains supply does not go through the meter. Try proving that I know that it is illegal to carry a knife or a gun that I bought over the counter overseas.

Would *you* know what sort of knife you could carry legally and what sort you may not? "I did not know it was illegal," is definitely

*not* a valid defence for any crime.

Although it strikes me as rather unfair that you can also be convicted of an offence if you *thought* you were buying an illegal drug when in fact you were buying a perfectly legal substance.

I believe that the law is flexible insofar that if you can convince a court that you believe the substance was a *specific* legal substance, you will be found not guilty. e.g. if you bought a bottle of asprin in a chemist and had no reason to suspect that the bottle contained anything else, but the pills turned out to be an illegal substance due to a mistake or malicious act by a third party, you'd not be convicted.

There is also the chattel exemption of 6000, and the wasting asset exemption, which may be available prior to using the standard Annual Exemption (currently 7900).

Not sure about that but its possible, In the case I was thinking about when I wrote the above, a man was charged with possession of an illegal drug, after he bought two cases of products, apparently believing them to contain perfume. As it turns out, one of them did, the other contained amphetamines, which was what resulted in the possession charge. The original judge directed that, since he was, in fact, in possession of the cases, it was a strict liability issue that he had no defence to the charge of being in possession of the drugs.

On appeal this was ruled to be a misdirection, but not materially so as to have affected the conviction. The appeal court ruled that it

*wasn't* enough that he was, in fact, in possession of the containers. To be guilty of being in possession of the drugs, you had to *know* you were in possession of the containers, which he clearly did anyway, hence the immateriality of the misdirection in this instance. He would have had a defence had he not known he was in possession of the containers (hence you can't be guilty of possession if someone plants something on you), but its no defence if you are mistaken about the contents of the containers you know you possess.

Brian

Extremely surprising. Are you saying that even though he fully believed that the containers held only perfume, he was convicted of possession? Or was there some doubt as to whether he really believed that the containers held perfume?

For all I know there may be packets of illegal drugs in the fuel tank of the 2nd hand car I bought.

Yes

I don't think it ever came to whether he was believed or not. The judge directed the jury that, even if he was telling the truth about what he believed to be the case, he was guilty of possession.

Looking again I see the case dates from 1969, and was tried under the Drugs (Prevention of Misuse) Act 1964. There was a subsequent revision to this Act, the Misuse of Drugs Act 1971, which seems to have clarified the issue regarding possession, and opened up the possibility of a defence along the lines you indicate. Its possihle that, were that case tried today, he would not have been convicted

Brian

Whatever happened to "Nulla Poene Sine Lege"? You can't have the courts creating the crime after the event, not in any civilised society.

Ah, but that's where the Man On The Clapham Omnibus test comes in, which basically says that, in appropriate circumstances, you can be presumed to have known that what you were doing was wrong. It basically shifts the burden of proof on the defendant to make a convincing case that he genuinely believed he was doing no wrong. That's a pretty good compromise, I think, between the manifestly unfair "automatic offence" and the clearly impracticable "I didn't know stealing was against the law, guv" defence.

Yes - and there may be a few more obscure ones (e..g., some antiques might be exempt or have a separate allowance if I recall correctly).

Thom

They only apply to capital gains, rather than income, though. Trading assets are exempt from capital gains tax, and if the Ebayer was making enough profit on the sale of small value items to think about relying on those exemptions, they'd almost certainly be treated as trading in them anyway, so the exemptions would be irrelevant :-)

Brian

I should have highlighted "sales of personal items " from the relevant post.

That's a bit strong - it only takes one unusually high price item sold on ebay (e.g., rare memorobilia) to bring you into CGT territory. I think if you had a FT job and traded as a hobby you'd probably still qualify for CGT (though few such traders will regularly get into CGT territory I bet that a few will).

Thom